The owners of a Lansing real estate business were found guilty Friday in a Ponzi scheme.

An Ingham County jury found twin brothers James Mulholland, of St. Petersburg, Florida, and Thomas Mulholland, of Midland, guilty of eight felonies each, according to the state attorney general's office.

The 59-year-old brothers, who started Lansing-based Mulholland Financial in 1987, raised money from investors and promised substantial returns even as the company was losing money, according to a statement from state Attorney General Bill Schuette.

They paid back promised returns to early investors with money from new investors and filed for bankruptcy amid inquiries into their business activities.

On Friday, the Mulholland brothers were convicted of charges including criminal enterprise, conspiracy to commit criminal enterprise, false pretenses, and violations of the Securities Act.

The punishments for those felonies range from five to 20 years in prison and/or fines between $10,000 and $500,000. The brothers are being held in the Ingham County jail and will appear Aug. 31 before Judge William Collette for sentencing.

“These men got themselves in a financial bind and instead of owning up to their mistakes they chose to defraud Michigan residents of their hard earned savings,” Schuette said in a statement. “I hope that this verdict will provide some closure and relief to the victims of these men.”

James Clayton Mulholland(Photo: Submitted)

Eric Sheppard, Thomas Mulholland’s lawyer, said he and his client were deciding whether to appeal the conviction.

“That decision will be made at a different time," Sheppard said.

Andrew Abood, James Mulholland’s lawyer, did not immediately return a call for comment.

Through Mulholland Financial, the brothers bought real estate and used it largely as rental properties in Michigan college towns. They managed $22 million worth of real estate at the business’ peak.

When the recession hit, the company began to lose money, according to Schuette. But, from 2009 to 2010, the brothers continued to promise a 7% return on investments and raised an additional $2 million from investors.

“They made no mention that their business was in trouble and promised a 7% rate of return from the real estate profits and that the principal and interest were guaranteed and could be liquid within 30 days of making a written request,” Schuette’s statement said.

But the brothers lost money nearly every month from January 2009 to February 2010. New investor money was used to pay off earlier investors, and the Mulhollands purchased more properties.

They filed for bankruptcy in February 2010 amid multiple investigations into the business. More than 250 investors lost $18.3 million, according to Schuette’s statement.

Schuette’s office picked up the case from the U.S. Attorney’s office this spring.

Andrea Bitely, a spokeswoman for Schuette’s office, said investors whose cases formed the basis for the prosecution against the Mulholland brothers will have restitution ordered. She said, as part of the company’s bankruptcy, investors received about a third of a cent for every dollar invested.

According to court records, the Mulholland brothers originally faced several other charges in addition to the eight on which they were convicted.

Sheppard said the venue on many of those additional charges was transferred to other counties.

“As of right now, those charges are still remaining in Kent County, Eaton County, Bay County and Shiawassee County,” Sheppard said.

The brothers faced similar allegations in a 2012 civil case in U.S. District Court.

The Securities and Exchange Commission alleged the Mulholland brothers raised $2 million from 75 investors between January 2009 and January 2010, according to a 2013 statement on the SEC website.

Similar to the state case, the brothers allegedly told investors in Michigan and Florida that Mulholland Financial Services was profitable, that the business would generate 7% returns for investors and that investors could get their money back with 30 days’ written notice — claims that the SEC alleged were false and misleading.

Thomas L. Ludington, a federal judge for the Eastern District of Michigan, issued a final judgement in 2013 finding the brothers liable for about $760,000 and a $150,000 civil penalty, according to the SEC statement.